The GPRO falling knife

If you are thinking of buying Go Pro due to the fact that its down big and maybe you can bounce it: yeah, don't do that. Its a falling knife and its gonna drop further.

Driven down by a flood of short sellers, having the wrong technicals on the candlestick charts and a craps analyst sheet is a solid recipe for no bounce. I wouldnt even pile on it at this point going the way its going because it could hit an oversold point. Probably right after you purchase some puts. Lets look at this trainwreck:

Ouch. Lots to say about this chart. Note the ADX on the top...reversal is anything near 15-20 and it is currently way high telling us it has no real thought of reversing the trend direction anytime soon. The Aroon indicator right under the candlecharts same thing It doesnt look like either one of those are going to cross for a while. And the Williams% is just laying lamely on the floor. The candlesticks are showing continuation in the downward trend and show no bottom. What about its fundamentals according to analysts?

Also not good. This shows that its not only risky short selling gambling, but there is a foundation in it via its sales forecasts. Its sales growth for this year and next year is pretty poor.

When you are thinking about trying to bounce stocks, always take a hard look at them to make sure they are not a falling knife and you get cut. People who briefly look at stock news and see a big stock is way down and think to themselves "Its gotta come back up, right?" most often get hurt. Look at the technical charts, look at the financial forecast.

Tradinginsider